Contract for world’s cheapest solar power signed for Dubai mega-project

DEWA has signed a US$29.90/MWh PPA with Masdar for the 800 MW third phase of the Mohammed bin Rashid Al Maktoum solar park.

The United Arab Emirates (UAE) has seen some of the lowest-price solar power contracts in the world, which has led to a combination of disbelief and skepticism about the viability of the projects awarded.

This PPA for the third phase of the Mohammed bin Rashid Al Maktoum Solar Park is the lowest price PPA globally known to pv magazine staff.

In analyzing how Masdar can make a profit on such a low PPA, Bloomberg New Energy Finance Head of Solar Analysis Jenny Chase has cited several factors, including low capital and operating costs, capacity factors of 25%, and the ability to access debt at an interest rate below 4%. (Note: This project and others in the region were examined in detail in the November print edition of pv magazine.)

And while US$29.90 sets a new benchmark, bids as low as US$24.20/MWh were submitted for an auction in Abu Dhabi in September.